Banking figures may face public inquiry

KEY players in the banking crisis could be hauled before a televised public inquiry after a report on the issue failed to pin the blame on any bankers or politicians for the “financial mania” that gripped the country.

A referendum will be held this year on giving Oireachtas committees more powers of inquiry to force those responsible for the banking mess to be answerable to the taxpayer, who is footing a €67 billion bailout bill.

“When the taxpayers are paying so much to rescue the banks, I think it would be proper that those that are personally culpable would be brought before an Oireachtas committee and would answer for what they have done,” said Finance Minister Michael Noonan.

Meanwhile, the Government admitted it is powerless to take back a €3 million golden handshake to former AIB managing director Colm Doherty when he left as part of the bailout deal last autumn. Mr Noonan said this was a “legacy issue” from the last Government and he was examining if other banking executives have “legal entitlements to similar kinds of deals”.

He was speaking after Peter Nyberg and the Commission of Investigation’s report into the banking crisis found “herding and group think” were “key drivers of financial instability”.

Studying 200,000 documents and interviewing 120 people, it “frequently found behaviour exhibiting bandwagon effects”.

There was a silencing of those who disagreed with banking policies during the boom who “may have ultimately lost their jobs, positions or reputations”.

The report said the Financial Regulator and Central Bank had enough knowledge of the banking sector to arouse suspicion about the threats emerging in the property market. But they were “in a state of denial” while warnings about stability risks were “sidestepped”.